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The media industry in China is gradually open up
to foreign investment and participation in varies sector like in
print, Television, radio, film, Internet, publishing and many other
areas.
According to the information provided by the SAIC
contained in the 2003-2004 China Media Yearbook and Directory which
is a publication of the China Advertising Association, the total
advertising turnover in China for the year 2003 reached RMB108 billion.
This is an increase of more than 19% over the total advertising
turnover in 2002 and it will break RMB 200 billions by 2008. On
he other hand, the proportion of advertising in the overall GDP
remains very low in China. It is only 0.6-0.7% compared to 1.5%
in the U.S. For example, the New York Times¡¦ one-year revenue is
equal to all the advertising income of all China¡¦s newspapers combined.
Most income of Chinese media firms come from advertising.
The second largest source are from program production. Broadcast
media represents a substantial advertising income. China's TV industry
has experienced rapid growth since early 1980's.
China has a population of 1.4 billion and as of
2003 had 37 national level TV stations, 363 city level TV stations
and 1,424 county level TV stations, which stations reached approximately
95% of the population. In China, there is only one TV station and
only one cable network company in each city or county and these
TV stations and cable network companies must be owned by local government
administration, as such, the ability to establish relationships
with these government owned TV stations provides certain protections
against outside competition as the number of available channels
are limited. The State Administration for Radio, Film and Television
(¡§SARFT¡¨), China's national regulatory authority for the broadcasting
industry, has mandated the migration of the cable broadcasting system
from analog to digital signal by 2015. According to the Statistics
Information of the SARFT, by the end of 2005 there were more than
4 million digital cable television subscribers in China.
The population in Guangdong province is over 83
million. There are about 99 city and county level TV stations in
Guangdong province, which cover approximately 96% of the population,
with approximately 10 million cable TV subscribers. According to
the Statistics Information of the SARFT, by the end of 2005 there
were more than 750,000 digital cable television subscribers in Guangdong
Province.
Income from TV commercials is the major source of
revenue for TV stations in China and in 2005 advertising income
reached $4.9 billion, which represented more than half of the stations
total income, an increase of approximately 15% from 2004. TV commercials
are sold to international and domestic advertisers. International
clients are charged predominantly in line with international standards
on a Cost Per Rating Point (CPRP) basis, especially in case of members
of the American Association of Advertising Agencies, which determine
spot pricing according to viewership reports provided by AC Nielsen
or CCTV¡¦s Central Viewer Survey and Consulting Center. Domestic
customers are normally charged at a fixed fee per time slot.
As outside industry capital can not invest in the
media industry in the past, 82% of Chinese media firms are capital
hungry. The huge growth of media industry lead to tremendous investment
opportunities under covered. With our very strong business relationship
and the know-who in China media industry, we believe the company
can grow very fast both organically and in-organically.
Currently, the company is actively working
with several companies in China in order to achieve strategic partnership
or co-operation in areas like TV Channel operation, advertising
sales and TV Program production.
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